Liquidium: The Future of Ordinal Lending on Bitcoin

Ordinal Labs
4 min readJul 3, 2023
Liquidum NFTfi on Bitcoin

Today, we dive into the world of digital assets and explore an innovative solution that is revolutionizing the sector. We delve into Liquidium, an original P2P Ordinal lending solution. Through this article, we’ll uncover what Ordinals are, their unique properties, the challenges posed, and how Liquidium provides a solution.

The Emergence of Ordinals

Ordinal Inscriptions, or Digital Artefacts, have taken the world of digital assets by storm. Ordinals are created by inscribing data on satoshis, the smallest unit of Bitcoin (BTC). Enabled by the Bitcoin Network’s Taproot upgrade, Ordinals present a whole new realm of possibilities for encoding transaction data, adding more flexibility and privacy to transactions.

Though similar to Non-Fungible Tokens (NFTs) found on other blockchains, such as Ethereum, Ordinals have distinctive features setting them apart. Their uniqueness lies in their direct inscription on the Bitcoin blockchain, not relying on any intermediary layer or protocol. Consequently, Ordinals inherit the unmatched security and decentralization of Bitcoin’s robust blockchain network.

Ordinals: A Closer Look

Understanding Ordinals’ special features can help us appreciate their rise. They are:

  1. Immutable and Scarce: Ordinals derive these qualities from the Bitcoin network’s limited block size and restricted supply.
  2. Ordinality: Ordinals are ordered based on the sequence of their inscription. The lower the index number, the higher the Ordinal’s likely prestige and value.
  3. Data Versatility: Ordinals can contain any binary-encoded data, such as images, videos, text, and even software applications.
  4. Increased Value: Ordinals can be inscribed on different Satoshis, which potentially increases the value of the Ordinal itself.

Recently, the market has welcomed a new type of Ordinal Inscription known as BRC-20, allowing for Fungible Tokens on Bitcoin using Ordinal Inscriptions’ principles.

The Liquidity Challenge for Ordinal Owners

The growth of Ordinals in volume and value is undeniable. Some pieces even sell for millions of dollars. Yet, this remarkable growth is not without challenges. The most pressing issue for Ordinal owners is accessing liquidity without having to sell their treasured assets. The introduction of Liquidium, a groundbreaking Ordinal lending solution on Bitcoin, provides a timely answer to this problem.

The Current State of NFT Lending

NFT lending is not new. For several years, Ethereum has successfully implemented it. However, the vast market cap of Bitcoin suggests a significant impact if lending solutions were available for Ordinals. This is where Liquidium comes in, facilitating the much-needed lending solution for Ordinal owners.

Introducing Liquidium: The Solution for Ordinal Lending on Bitcoin

Liquidium is a peer-to-peer lending protocol operating exclusively on the Bitcoin blockchain. This innovative solution allows users to lend and borrow native Bitcoin using native Ordinals as collateral, eliminating the need for intermediaries or custodians.

The protocol offers several advantages:

  • Users can use borrowed Bitcoin to purchase more Ordinals or any other Bitcoin network asset without changing wallets, blockchains, or platforms.
  • Users avoid wrapping their Ordinals to another chain, which could involve additional risks and fees.
  • Liquidium leverages Bitcoin’s security, scalability, and privacy to benefit its users.

Liquidium has already launched an NFT lending protocol on Stacks as an MVP and will be the first Ordinal lending marketplace on native Bitcoin. This will enable Ordinal DeFi, demonstrating its growing popularity as the waitlist for Ordinal Lending has gained over 15k submissions in less than 24 hours.

How Liquidium Works

The operation of Liquidium is transparent and straightforward:

  1. Borrowers request loans by setting the desired loan terms and locking their Ordinals as collateral.
  2. Lenders review loan requests and provide Bitcoin to borrowers that meet their lending criteria, thereby initiating the loan.
  3. If borrowers do not repay the loan on time, the loan defaults, and the Ordinals are transferred to the lenders.

To maintain fairness and security, DeepLake Oracles verify the loan outcomes by examining on-chain activity. This protocol ensures minimal trust issues and transparent transactions.

Conclusion

With Liquidium, Ordinal owners can tap into liquidity without relinquishing ownership of their unique assets. This is a significant step in NFT lending, catering specifically to Ordinal owners’ needs.

By offering a P2P Bitcoin lending platform that uses Ordinals as collateral on Layer 1 Bitcoin, Liquidium enables true Bitcoin DeFi. This revolutionary protocol is set to redefine the lending landscape and open up new opportunities in the world of Ordinals.

Liquidium is leading the charge in the Ordinal lending space at a pivotal time. With its innovative concept, proven demand, and unique solution, the future of Ordinal Lending and DeFi looks promising with Liquidium. Let’s watch this space.

For more information follow Liquidium on Twitter: @LiquidiumFi and find the full documentation here; https://liquidium.fi/

Created with Chat 4 AI-assistance (For formatting and structure)

Disclaimer: This article is intended solely for informational and educational purposes and should not be construed as financial or investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. All investment strategies and investments involve risk of loss. Cryptocurrency investments, including Bitcoin and Ordinals, are especially volatile and risky. Therefore, you should always perform your own due diligence and consult with a qualified financial advisor before making any investment decisions.

--

--

Ordinal Labs

Attempting to simplify the latest innovations within the Bitcoin and Ordinal space.